LG “more than 2 trillion” SK “500 billion more”… Last 60 days of battery war

On the 10th (local time), the US International Trade Commission gave LG Energy Solutions a hand in a battery technology leak lawsuit that lasted nearly two years. [뉴시스·연합뉴스]

The U.S. International Trade Commission (US ITC) gave LG Energy Solutions a hand in a battery technology leak lawsuit that lasted nearly two years. On the 10th (local time), ITC ordered a ban on imports from SK Innovation’s batteries and related parts into the United States. The import ban period is 10 years. However, for Ford and Volkswagen, which have already signed battery supply contracts, they gave grace periods of 4 and 2 years, respectively.

SK Innovation, which must be produced at its US plant, is expected to inevitably hurt its business activities in the future. As electric vehicle battery technology is rapidly changing, the 10 years designated by ITC is long enough to change the industry paradigm.

Even with the ITC decision, the two sides exchanged workshops throughout the Lunar New Year holiday until the 14th. Immediately after the ITC’s decision came out, LG said, “SK will accept the ITC’s decision and close the rest of the litigation as soon as possible with a proposal that matches it.” I will proceed.” In response, SK said, “The ITC decision could not actually reveal the fact of infringement of trade secrets, the issue of the lawsuit. We will try to protect our customers by making sure that there is no disruption in battery production in the United States.”

A mass-produced car company that signed a contract for supplying electric vehicle batteries with SK urged an agreement between the two companies. “The agreement between the two companies is best for American manufacturers and workers,” said Jim Parley Ford, CEO of Ford. Volkswagen also said, “We suffered unintended damage due to the dispute between Korean battery suppliers. SK’s electric vehicle battery can be used for at least four years,” he asked the US government.

In the US politics, voices came out demanding the president’s veto. On the 12th, Georgia Governor Brian Kemp, where the SK plant was built, claimed, “The ITC decision put the jobs and manufacturing industries hit by the novel coronavirus infection (Corona 19) at risk.” However, industry observations are that the likelihood of President Biden’s veto power according to the practice of respecting ITC decisions is quite low.

ITC decisions are finalized after a 60-day presidential deliberation period. This means that the two companies have been given 60 days to agree. During that time, the two companies had negotiated several times under the water, but in the end they could not reach an agreement. There was a big difference in the settlement amount, but both companies have been waiting for the ITC decision. According to the ITC’s decision, one party can preempt favorable notices in the consensus process.

LG, which ITC raised its hand, immediately held an online press conference and pressed SK. Seung-se Jang, Managing Director of LG Energy Solutions, argued that “(SK) will have a hard time winning orders without resolving compensation for damages.” Accordingly, an SK official said, “If it is reasonable, we will negotiate any time,” and “Let’s end the lawsuit early and cooperate for the development of the industrial ecosystem and the national economy.”

In the industry, there is a prospect that the agreement between the two companies is a matter of time. It is interpreted that the ITC decision will ease the uncertainty and speed up negotiations that had been sluggish. The problem is the amount of settlement. According to the battery industry, LG is demanding more than 2 trillion won, but SK is in a position that it is also 500 billion won.

LG-SK battery business secret infringement lawsuit log. Graphic = Reporter Jaemin Shin [email protected]

It’s not just the ITC decision that pressures the agreement between the two companies. Apart from the ITC, civil litigation in progress at home and abroad is also a pressure on the agreement between the two companies. Apart from civil lawsuits, the police are investigating SK Innovation for violating the Industrial Technology Protection Act. Prior to this, LG Energy Solutions sued the police against SK Innovation in 2019 for infringement of trade secrets.

Apart from the settlement money, homework to fill the deepening emotional goal between the two companies remains. It is unusual in the light of Korean corporate culture that the 3rd and 4th largest companies in the business world are fighting openly. A business official pointed out that “there are a lot more disputes between companies than they are exposed to, but since they are directly connected to the corporate image, it is common for most of them to proceed quietly under water.”

Reporter Kiheon Kang [email protected]